Your credit score is a number that measures how much of a risk you are when borrowing money or applying for credit lines such as credit cards. In essence, it shows banks and lenders your level of creditworthiness, and if they can trust you to pay back the loans. The bottom line is that your credit scores are calculated based on your past behavior. If you pay your monthly payments for the mortgage, automobile loan, credit cards, and other types of loans on time, it reflects positively in your credit score.
On the other hand, if you fail to make timely payments, it will impact your credit scores in a negative manner. That being stated, there are other factors that go into calculating your credit scores as well. The following information will explain this in further detail.
Items That Are Not Calculated In Your Credit Score
Your credit score only factors in line items that appear on your credit report. They do not include your income, your place of residence, your age, race, gender, religion, marital status, or national origin. Child support/family support obligations are also not factored into the equation. Whether or not you are utilizing a credit repair service also does not play a role in calculating your credit scores.
The Primary Credit Scoring Models
For many years FICO was the only credit-scoring model that was used by lenders and credit card companies. That is why when most people talk about credit scores they are referring to the FICO Score. Although it still remains at the forefront to this day, there is another model that was formulated by Equifax, Experian, and TransUnion, the three (3) main credit bureaus. It is called VantageScore. While similar to the FICO Score, VantageScore does utilize a slightly different set of weighted criteria’s.
FICO Scoring Criteria
Your FICO credit scores ranges anywhere from 300 to 850. Thirty-five percent of the score is based on your payment history, 30% is based on the amount of money that you owe to creditors, and 15% is determined on your length of credit history. The remaining 20% is calculated in the following manner. Ten-percent is based on your new credit accounts, and the remaining 10% is based on the types of credit that you have.
VantageScore 4.0 Scoring Criteria
There are currently two (2) versions of VantageScore on the market. We are using the criteria for VantageScore 4.0 due to the fact that it is the newest version. VantageScore credit scores also range anywhere from 300-850. Forty-one percent of the score is based on your payment history, 20% is based on your credit utilization, and 20% is based on the age and mix of your credit accounts. In addition, 11% is based on new credit, 6% on your account balances, and the remaining 2% on the available amount of credit that you have remaining.
If you feel that you are being treated unfairly by a creditor or collection agency, please contact us immediately. Legal Rights Advocates, PLLC is a consumer advocate law firm that focuses on consumer rights protection services across the United States. We have well over twenty-five (25) years of combined experience helping consumers that are experiencing Debt Collector Harassment, Social Security Disability issues, and a whole lot more. LRA is truly your consumer rights advocate. We take great pride in the fact that our job is to protect you from deceptive and or abusive debt collection practices.
Our goal is to assist you each and every step of the way regarding your rights for consumer protection. Please call us today for more information at 855-254-7841 or click here for a FREE Case Review. We look forward to working with you.
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